Poker News Daily

888 Share Price Plummets as CEO Leaves Under Shadow of Internal Investigation Into AML and KYC Failures

888 staggered

The bottom dropped out of shares in gambling group 888 Holdings plc on Monday as CEO and Executive Director Itai Pazner has stepped down from both roles as an internal investigation into possible failures in the company’s anti-money laundering (AML) and know-your-customer (KYC) processes.

888’s shares opened down nearly 10% from Friday’s close of 103.20p to Monday’s starting point of 93p. It only got worse from there. The stock price hit a low of 72.65p and barely bounced off of that, closing at 74.85p, for a stunning drop of 27.47% on the day.

In a public statement, 888 said that it is immediately suspending VIP customer accounts in the Middle East, explaining that “it has come to light that certain best practices have not been followed in regard to” AML and KYC practices. The company believes that the issues are limited to that specific region.

888 also attempted to assure investors that the suspensions only impact less than 3% of company revenue, should they remain in place long-term or permanently. It looks like the financial markets were less than convinced.

Itai Pazner had been with 888 Holdings for over 20 years and had been CEO since 2019. Lord Jonathan Mendelsohn, the company’s non-executive Chair, will take over as interim CEO. According to Financial Times, Mendelsohn told analysts that Pazner’s leaving “was the result of several management and compliance mistakes.”

Interestingly, a different version of the same Financial Times article did not include the above quote. Regardless, it is widely assumed that Pazner was forced out because of the compliance issues that have led to an investigation and possibly £50 million in lost revenue.

Company has some baggage

It certainly did not help Pazner’s case that the UK Gambling Commission fined 888 £9.4 million nearly a year ago for social responsibility and AML failures. In that situation, some customers were allowed to deposit and/or gamble away five-figures without any communication from 888, requesting source of funds proof or the like. The UKGC issued a formal warning and announced an independent audit.

888 is also swimming in debt – £1.8 billion – largely the result of its acquisition of William Hill’s international business last year.

The company will also lose its CFO at the end of the year, though Yariv Dafna, probably in light of what just happened with Pazner, to stay until the end of 2023, rather than leave on March 31, as originally planned.

888 does not have a particularly large presence in the United States. It operates its own online casino and sports betting brand in New Jersey, but other than that, it licenses its technology to other companies. It is the backbone of the limited-reach SI Sportsbook, but is best known in the US market as the engine for WSOP.com and Delaware’s racino-based online poker rooms.

Exit mobile version